For a better understanding of what transpired, read this Reuters quote of a strategist at Daiwa Securities: “The problem is that no one thinks that the Nikkei would hit 18,000 in the near future because of uncertainties in the U.S. economy. Earnings forecasts from Japanese companies will be conservative and unlikely to support the market either. Naturally, investors want to sell whenever they get an opportunity to do so.”

A senior strategist at Toyota Asset Management comments: “A cheap yen and others tell you that the business environment looks favourable to corporate earnings, but investors are not confident because companies are cautious.” [Reuters]

Keep reading for today’s market data.

The Nikkei 225 Stock Average lost 0.6% to 17,527.45, trading between 17,452.12 - 17,782.08. N225 futures in Osaka lost 0.2% to 17,610 and had a trading range of 17,470 - 17,810. TOPIX 1st section fell 0.55% to 1,716.1 — it traded to as low as 1,705.91 an hit an intra-day high of 1,736.47. Decliners outpaced advancers by a wide margin: 1,249 x 381 (99 unchanged) and 28 of 32 industries posted a daily loss. The only real standouts were in maritime shipping.

TOPIX 2nd section was down for a fourth straight day and set its third consecutive day of new calendar year lows. Weakness persists broadly among smaller caps; JASDAQ down yet again, -0.4% to 80.80. I will have to confirm, but I think it’s at new calendar year, 52wk and multi-year (since late ‘04) lows. The latest published yen/dollar rate is 119.18.